Cobram Estate Olives Limited (CBO.AX) Earnings Call Transcript & Summary

Okay. Good morning, everyone, and welcome to the Cobram Estate Olives Limited Financial Year 2025 results presentation, and thank you for joining us. My name is Sam Beaton. I'm one of the joint CEOs. I'm joined here today by Leandro Ravetti, my other joint CEO. In terms of how we operate as joint CEOs, we both oversee the Australia and the U.S. operations, but we focus on our core areas of expertise, so me on the areas of finance and commercial and Leandro on operational and technical. In terms of the agenda for today, I'll take you through a summary of the results. and also a commercial update. I'll then hand to Leandro, and Leandro will take you through an operational update and also an update on our growth strategies. We'll have plenty of time for questions at the end. [Operator Instructions] During Leandro and my presentation, please make sure all your microphones are muted. This year has been a fantastic year for the business where we've recorded record profit and operating cash flow. We continue to see strong demand for high-quality, locally produced extra virgin olive oil in both Australia and in California. We reported double-digit sales growth in Australia and significant growth of Cobram Estate in the U.S.A., where sales of Cobram more than doubled. From a capital point of view, the business is now predominantly through its growth CapEx phase in Australia, and we'll move now to a sustaining CapEx program. Our growth CapEx will now be focused on the U.S.A., particularly around increasing supply. This year, we reported an EBITDA profit of $116.6 million. This was 75% up on last year or a profit after-tax of 167.8 -- sorry, of $49.6 million, up 167% on the prior year. And from a cash flow perspective, we reported record operating cash flow of $83 million, which was up 29.6% on the prior year. Driving these results was our increase in sales. At a group level, we reported sales of $234.4 million (sic) [ $237.4 million ]. Pleasingly for us, the sales was driven by strong growth in branded sales. In Australia, our branded sales grew 16.6%, up to $141.4 million. And in the U.S.A., our Cobram Estate branded sales more than doubled to $42.3 million. A more detailed profit and loss, and just a reminder to investors how we account for our olive crop. Under accounting standards, we are required to value the crop in the year of harvest. And we do this by taking the expected net selling price or the fair value. We then deduct the actual cost of selling, and then that difference is taken to our profit or loss in the year of harvest, not in the year of sale. The inventory, the olive oil then sits on our balance sheet at that high fair value and then is taken through our profit and loss through our COGS line as we sell the oil. This year was an on year, so we expected that fair value gain to be higher than last year. We look at our business on a segment basis, the Australian olive oil business and the U.S.A. olive oil business. Looking at Australia, our EBITDA was reported at $110 million, up from $60.9 million. The growth in this EBITDA was driven by the higher crop, where we processed 14.2 million liters compared to 10.1 million last year, also from the strong growth in branded sales of 16.6% compared to prior year. And we had a higher percentage of our olive oil going into packaged goods, up to 94.4% of Australian sales. In the U.S.A., our EBITDA was reported at $6.6 million, up from $5.8 million. Growth in profit driven by the increase in branded sales, this was partially offset by the increase in people and investment in our brand through marketing as we gear up to sell more oil as our groves mature. Cash flow. Cash flow is more consistent than our reported profit, and that's because of the way we manage our oil over 2 years. Our customers buy oil from us consistently month in, month out. So when we've got a higher cropping year, we'll sell the oil over as long as 16 months. And then we've got a -- when we have a lower cropping year, like the year before this, we'll sell the oil for as little as 8 months. And what that means we get more consistent operating cash flow. Having said that, we have managed to grow operating cash flow again. We reported a growing operating cash flow up to $83 million, up from $64.1 million, and that was a record for the company. On an after interest and tax basis, our operating cash flow was $58.1 million, up from $47.9 million. The business continued to invest in capital, mostly growth CapEx projects. We invested $81.5 million compared to $66.2 million last year. Predominantly, the major projects for that capital spend were the finalization of the Boort mill upgrade. The Boort mill, we now have enough capacity to process all our fruit at full maturity and our third-party growers. And we have enough capacity at other mill at Boundary Bend to handle for maturity. During the year, we also paid a dividend. Net of DRP, our dividend was $12.1 million. At 30 June, we had available debt facilities or available and undrawn debt facilities and cash totaling $41.5 million. This chart shows our growing operating cash flow over the last 5 years. The dark green is before interest and tax, and the gold is after interest and tax. As you can see, our operating cash flow has grown at a rate of 39% compound growth over that period. And this is really being driven by the maturing groves, the increase in branded sales and also the maturing profile of our U.S.A. business. Just a quick recap on capital projects over the last 5 years. We've invested in excess of $250 million cash in capital projects, predominantly all growth capital projects in Australia. We've developed 1,145 hectares of new olive groves. We did a major upgrade and rebuild at the Boort olive mill, doubling capacity to 80 tonnes per hour. And we also completed a warehouse automation project at our Lara bottling facility, which Leandro will talk more about in his section. As I said earlier on, the growth CapEx phase has concluded this year in Australia, and we'll now be transitioning to a sustaining CapEx program from FY '26 onward, which we estimate will be around $10 million to $15 million per annum. In the U.S.A., over that same period, we now have 1,025 hectares of our owned groves. We've recently purchased 1,596 hectares of new land, which we estimate we'll be able to plant just under 1,000 hectares of new groves over the coming 18 months. We've completed a Woodland site expansion where we doubled our mill capacity to gear up for future growth in production. And we've also commenced the bottling warehouse upgrade at that site. And as I said earlier on, our CapEx will be more focused on -- our growth CapEx will be all focused on the U.S. going forward and particularly around increasing oil supply. Our balance sheet. Our net assets as reported, increased to $365 million, up from $321 million. A couple of things to point out on our balance sheet: our trees and irrigation infrastructure, we carry at written-down cost, not at external valuation, and I'll talk more around that in the next slide. Our brands, so Cobram Estate and Red Island, we record on our balance sheet at purchase price, which was around $6.5 million. It's within that intangible line. So under accounting standards, you can't revalue them to fair value. And the other key item on our balance sheet, just to point out, is the deferred tax liability, the majority of that relates to historical asset write-ups of our olive grove, that would only ever be payable if we sold those assets outside of the group. From a net debt ratio perspective, our net debt ratio increased to 32.7%, up from 31.5%. The bar chart on the left, the left 2 bars at 30 June 2025, asset value against borrowing, against the 2 bars on the right, 30 June 2024 asset value and 30 June 2024 borrowings. The assets include the assets that sit on our balance sheet, and the top light green part is the irrigation infrastructure and trees over and above book value when you compare it to external valuation. So on that basis, our gross asset sits at just under $1 billion at $978 million. When you compare our borrowings against our adjusted asset value, the ratio sits at 27.1%. Moving on to sales. So this chart shows the sales over the last 4 years split into Australia and U.S.A., so all olive oil sales. As you can see, we've grown at 20% compound growth. Our sales of the group are now at $237.4 million olive oil sales. And as you can see, the U.S.A. now contributes more than 25% of our group sales. If you look at just packaged goods sales in Australia, this slide is, on the bottom part, so the purple part, it's branded sales, so Cobram Estate and Red Island; and the top part, the green part is private label. Growth in branded sales represented a 16.6% growth rate. We're now up to $141.1 million, and we continue to see that strong demand for product. And it's a really pleasing result, particularly given the supply constraints we've faced over the last several years. The U.S.A., so this is U.S.A.-only packaged goods sales over the last 4 years. Cobram Estate, the highlight of this chart has more than doubled, so sitting at $42.3 million compared to $21 million last year. We've seen growth in sales has been contributed to a number of factors, including increased turn rates at store, increased distribution and some price. We're now the #9 top-selling brand in the U.S.A. and the #2 U.S.A. produced brand and ranged in 18,748 stores. Moving on to marketing. So we continue to invest heavily in marketing, and we've actually increased our investment in both Australia and the U.S.A. in readiness for increased supply coming on in both of those countries. The key pillars around marketing remain the same and promoting the quality of our product, the usage occasions and, of course, the amazing health benefits. And we're now in the 10th year of a Healthcare Professional Program, where we educate health care professionals around the health benefits of extra virgin olive oil and ultimately, that flows through to educating our consumers. We just released our new marketing campaign. You may have seen this on various media channels. This is around education of the freshness of our product, but really highlighting the health benefits of olive oil, particularly the link between heart health and consumption of fresh, high-quality extra virgin olive oil. In the U.S.A., again, we continue to invest heavily, and we have upped our spend in the U.S.A. in readiness for future supply. Our marketing strategy is very similar. We do spend more of our dollars in store, whether it be sampling, coupons, catalog targeted socials. And we've also developed some good relationships, and we have some formal partnerships with some influencers and a celebrity chef, Curtis Stone, who has a great profile over in the U.S.A. and has been a fantastic partner. In terms of business update and outlook, we're still seeing strong demand for our quality product in both Australia and in the U.S.A., and we expect that to continue through the year. The U.S.A., we commenced harvesting in October, November. Leandro will talk more around that. But we don't expect a materially higher crop this year, but we do expect oil from our own groves to be significantly higher. In Australia, this year is an off year. However, we only expect our crop to be moderately lower than FY '25. And again, harvest is in April, May, June 2026 in Australia. We have previously announced that my co-CEO, Leandro Ravetti will relocate to Australia. It certainly won't change the way we jointly manage the business, but will certainly allow Leandro to invest more time in our executives in the U.S.A. and also assist with the rollout of the land acquisitions and plantings where we'll be investing a lot of our capital. In terms of funding growth, as we have done over the last several years, our strong operating cash flows combined with debt facilities are expected to fund our committed CapEx. And certainly, that's helped by the Australian business transitioning to a sustaining CapEx program from this year. From a cost perspective, input costs have actually remained relatively stable. Water, we are expecting to be more expensive this year. Leandro will cover that in more detail during his section. Our dividend, we previously announced that the Board is intending to pay a $0.045 per share dividend. It will be fully franked to be paid in late November 2025. The details of this dividend payment will be announced at our AGM on the 31st of October 2025. Before I hand to Leandro, I'd just like to thank the outstanding help and support from our Chair, Rob McGavin, our Board, our outstanding executive team, all of our employees, nothing would happen without you. Our great suppliers and importantly, our customers that continue to buy an amazing product, and we thank you so much for your support. And we're really, of course, looking forward to the 12 months ahead and beyond. I'll now hand to Leandro Ravetti, my joint CEO, and he'll take you through an operational update and an update on our growth strategies. Thank you.

Thank you, Sam, and thank you very much to all of you joining us today for this presentation. I'll provide you now with a brief update on our operations, expanding a little bit on some of the points that Sam discussed before, both for Australia and the U.S.A. If we move to the next slide, I won't go through the figures on this coming slide in detail because they will be covered throughout my presentation. But fundamentally, they show, in a very simple way, the consolidation of Cobram Estate Olives as one of, if not the largest, fully vertically integrated olive oil company in the world when we combine our geographical reach, the area planted, the level of production and the brand strength. More excitingly, we will also see how much inbuilt organic growth is yet to be realized in both countries. We move to the next slide. From the operations point of view, our Australian olive harvest was successfully completed on time by the beginning of July 2025. As it was said before, the total production of 14.2 million liters of oil was 40% higher than last year and 10% higher than 2023, which was our previous comparable on year. It is important to point out also that 2026 is expected to be an off year on most of our Australian growth. But based on the current condition of the trees, which obviously we can see and the maturing profile of the latest plantings, we forecast the crop to be only moderately lower than the crop that we achieved in 2025. Move to the next slide. Yes, just to give a little bit more color to this amazing harvest operation that goes on 24/7 for 10 to 11 weeks. You can see some photos of this year's Australian harvest in this slide, including some of our equipment, infrastructure and amazing staff that makes this happen. We will be in touch over the coming months to invite you to come and see it firsthand during the upcoming 2026 season at our shareholder open day. Move to the next one. Sam briefly touched on this. In general terms, most grove inputs and overall general operating costs remain relatively stable, in line with previous years, during FY '25, we sourced nearly all the water required for our Australian olive groves on the temporary water market at a weighted average price of $139 per megaliter, with current water prices trading at higher values than this time last year. As always, we stay away from predicting water prices, but to provide a better context on average, over the past few years, water accounted for 5% to 8% of our annual grove operating costs, including depreciation, and every $100 per megaliter change in temporary water price has an impact of approximately $4 million on us. Moving now to an update on -- in the U.S. Californian groves are typically harvested between October and November. So we are a couple of months away from the start, with the groves having been through already the peak flowering period in May and having already started the oil accumulation phase. Winter and spring weather conditions were beneficial for flower induction and fruit set. And while the proportion of oil from our own groves is expected to increase this year, the total production is not anticipated to be materially higher than last year. And consequently, short-term sales growth may remain somewhat limited by overall supply constraints. And to finalize our presentation, as we normally do, I'll touch on the key developments related to our 4 growth pillars. These pillars are quite simple and focus on producing more oil from our Australian olive groves through the maturing profile of our trees, growing our fully vertically integrated business in the United States, improving the net price per liter for our oil through focusing on the growth of branded product sales at higher values and increased efficiencies, and finally, capitalizing on our naturally sustainable position and upcycling of the olive oil byproducts. Moving to the first pillar. With our modern production system, olive trees reach maturity and maximum production levels when they are approximately 8 years old. Given the significant investment that Sam described, we have done over the past decade in new groves, our mature area in Australia is set to increase by 42% over the next 7 years as 20% of our trees are still immature and 10% are not yet productive. When all that area reaches maturity, and assuming no further replanting or new developments or additional long-term third-party groves, they should reach the potential production figures shown in the graph to the right of your screen, 23 million liters. This growth in production when compared with the last 2 years is extremely relevant in terms of the future as many of our production costs are relatively fixed, and this first growth pillar is directly related to the improvement as it has been over the past few years of the company's financial performance with the value of the additional oil mostly flowing directly as profit. During the past financial year, we completed the last significant growth capital project in Australia, with the additional processing lines installed at Boort. This equipment that we can see in the photo increased our overall milling capacity to some 1,800 tonnes of olives per day, making the Boort facilities one of the world's largest olive mills. Our Australian operations, as Sam explained before, will require no further growth capital expenditure to support the organic growth of production expected from the maturing groves that I explained before and will transition now to a sustaining CapEx program from FY '26 onwards. If we switch to the second growth pillar, our business in the U.S.A. In the case of California, you can see from the graphs in this slide that we are expecting a significant boost to our California supply from the maturing profile of our groves. And expected new plantings in the short term, given that nearly 30% of our existing groves are immature and a massive 52% are yet to start bearing fruit. So that means that they are less than 3 years old. To put it in a different way, the expected supply from our own existing groves, as you can see in the graph to your right, and those to be planted over the next calendar year, when they reach maturity, they will increase approximately 11x the amount of oil produced and available when compared with the average comparable production of the past 2 years. In the case of the U.S., we have several key capital projects on the go related, obviously, to this growth pillar. Firstly, we have completed the Phase 2 of our Esparto South Ranch and the Phase 3 of our Dunnigan Hills Ranch with a total of 180 hectares of olives planted between October and November 2024. And then we move probably to the most exciting part. A very important note to make, and which is we can see in this next slide, is that the ongoing expansion of our operations in America not only strengthens the future olive oil supply and delivers greater economies of scale, but given the current land prices and the project returns, it also represents a compelling stand-alone investment opportunity. That's why we have recently completed the strategic acquisition of nearly 1,600 hectares of land in California, all located near our existing groves, and this will allow us to access 109 hectares of an existing olive grove and to develop approximately 980 additional hectares of new grove, which are scheduled to be planted over the coming 14 months, nearly doubling our planted area to reach around 2,000 hectares by the end of 2026. Additionally, we also still have a strong pipeline of new properties currently being considered for acquisition and future development with, as I explained, the committed CapEx for these projects being funded through a combination of operational cash flow and debt. Last point regarding the U.S. to meet the expected growth in olive oil supply over the coming 5 to 8 years. We upgraded our mill, our storage facilities, and we are now currently undertaking the expansion of the finished goods warehouse and the installation of a new bottling line. That bottling line currently being factory tested in Italy will increase bottling capacity from 3,500 to 16,000 bottles per hour, significantly enhancing the throughput and packaging efficiency of our facility. Move now to the third growth pillar that is linked to increasing the net return per liter. We are continuously evaluating and trialing several initiatives across all areas of operations, both in Australia and the U.S.A., where technology could unlock higher efficiencies and lower production costs. One of those initiatives became a reality during FY '25, with the commissioning of 3 automated guided vehicles, or AGVs, at our Lara bottling and warehouse site. These AGVs that you can see on the right-hand side of the screen are delivering cost efficiencies and optimization in the use of existing warehouse space while improving work safety. In other words, this investment enables us to handle the increased volumes of finished good products as olive oil supplies continues to grow more safely and at a lower cost per liter. And just wrapping up my presentation, Sustainability has been in our DNA from the very beginning, more than 25 years, although in recent years, we implemented a more formal approach to sustainability that is in line with mainstream expectations and corporate best practice. As a result of this, we have identified a list of priority topics that have been clustered into the pillars of people, planet and business, and all of them have been integrated into the 2030 sustainability strategy that was adopted and presented last year. In this financial year, we advanced key sustainability initiatives aligned with that strategy across both Australia and the U.S.A., including a sustainability-linked loan with CBI, conservation and certification programs and expanded education and advocacy on the environmental and health benefits of extra virgin olive oil. In the body of our FY '25 report, you can read in more detail about our formal commitments and targets across a wide range of topics from safety to health care professional education and from protection of biodiversity to quality and diversity and inclusion. Given the time constraints of this presentation, I will not go through all of them in detail, but to all of you that with a particular interest in these areas, I would encourage you to read it, and we would welcome any feedback that you may have. Only one very important aspect worth highlighting is that based on the FY '25 greenhouse gas assessment, we continue to deliver a better than neutral position considering our sinking sources and all Scope 1, 2 and 3 emissions. This is a very encouraging result, given the inclusion in these calculations of a fully comprehensive list of Scope 3 emission categories and still maturing profiles of our groves, particularly as we have seen in the U.S.A. I think this is all what I have for today. So happy to ask Sam to join me back for any questions that you may have.

Thank you, Leandro. And it was pointed out that I said you're moving to Australia during the presentation, but of course, you're moving to California. So just to clarify, I think that's reasonably clear to everyone. I will call your name, and there's a couple of people with questions here. [Operator Instructions] So we've got Larry Gandler from Shaw.

Yes. Can you hear me?

Yes.

Yes, Larry.

Sam and Leandro, well done on a fantastic result. Just want to ask a few questions about cash flow in the U.S. When you look at the U.S. next year, what sort of constraints will you have in terms of the growth because of supply? Are you indicating that because of the shape of the harvest this year, you will have constraints in terms of volume?

Yes. Sorry, Leandro. Yes, as Leandro said, we don't expect our harvest this year to be materially higher than last year, which will constrain our sales growth. Within that, though, the growth of our oil from our groves will be materially higher. But unfortunately, our third-party groves, we're expecting to come off slightly from their existing groves.

Okay. Great. So that's understood. And with regards to Australia, you've obviously got supply there. Last year, FY '25 was more of a year of price growth than volume growth. FY '26 will be more of a year of volume growth and price growth. I'm just wondering in terms of margin and cash flow, are there any things to call out because of the shape of those 2 years?

No, not really. I think like other years, it will remain strong and reasonably consistent. You're right. The year just gone was mostly price growth. We were unfortunately constrained by supply, and we started selling new season oil from Australia in April actually and had new season all on shelf by the end of April, which is very unusual, but it was really due to the high demand. So we wish we had more oil, but that's all we had. We've got Mark Topy next.

Just a question now around the sort of the global supply and demand, now that -- and I know that Cobram historically been very resilient to imports coming into Australia. But even in context to the U.S., and seeing the very dry conditions almost drought conditions in Spain again, just wondering how the global supply position looks and what's your take on that? And obviously, the tariffs on the Europeans as well.

I'm happy to cover a little bit of an update on what's happening from a supply perspective. Sam will touch on -- mainly on the influence that it has on our strategy, which, as we've always seen is quite little. But I think that after a return to sort of rather normal conditions and yields in FY '25, the prices softened from historical highs to what is the current levels, which is important to flag that they're almost 100% higher than what they were 5 years ago. I'm talking about commodity prices. Then we had some initial expectations of an above-average crop in Spain for this coming season, but those forecasts have dropped on the back of an extremely dry and hot summer. You all probably have seen the images of the fires in Spain and so on. In the case of olive, it led to a bit more fruit drop and olive accumulation not normal, downgraded a little bit of the adjustment of crop expectations and that combined with record sales globally over the past few months, that stabilized and slightly strengthened the commodity prices. So we don't really expect, not that we really pay a lot of attention, but we don't really expect the world prices to change dramatically over the short term. But I think fundamentally, how we read is that this is a great indication of the strength of the industry where record volume sales are being achieved at commodity prices close to historical highs if you don't consider the spike that we had during 2023. But Sam will probably touch much more on...

Yes. Certainly covering on that. We've seen more normal supply conditions from imported oil into Australia, probably since for the last 9 or 10 months and same with promotional programs has gone back to what we call more normal. And it certainly hasn't impacted the demand from our product. And we just continually focus on selling our differentiated product, which is a locally produced high-quality extra virgin olive oil in both Australia and the U.S.A. And we think we're giving our customers terrific value. And because of that, your question on tariffs. So in the U.S.A., nearly all the oil we sell is locally produced. And just as a reminder, about 95% of oil that's sold in the U.S.A. is imported. So that certainly puts us at an advantage -- at a cost advantage to our competitors.

Yes. I'm just sort of wondering how that's going to play out. How do you see that happening over the next 12 months? Or have you seen any of the price sort of movements as yet on Europe? Or are they absorbing the pricing tariff increases?

It's very difficult because it's such a fragmented market over there. We haven't seen material changes though, as yet. But having said that, it's still relatively new and takes a while to flow through supply chains.

Yes. Sure, sure. And on that water side, I guess we've seen sort of the water, obviously, hit 200 or more meg. Well, we have had some rain now. So can you give us a sort of sense of where you're seeing the prices? And if we do have some more rain, just your expectation whether that might improve the situation?

Yes, happy to comment on that. I mean, you're right. So water, depending on which system is trading, sort of between that high 100s to high 200s. But having said that, there's been a significant increase in storage levels over the last 2 months. The bureau are forecasting reasonable rainfall over spring, but we don't know, Mark. It's likely to be more than last year where we paid $139 a megaliter, but where it ends, we don't know. As Leandro said in his presentation, $100 per megaliter will cost us roughly an additional $4 million.

Yes. And then just lastly, just on Boort. I think at various times, the company said maybe the yield. Boort might even be higher than some of the existing olive groves in Boundary Bend. I was just wondering how you're seeing that now in terms of yields on some of the newer olive groves in Boort?

I think the new groves at Boort are evolving, just all the latest findings are evolving sort of naturally as we expected without significant ups and downs. And it's in part the maturing profile of those trees that are sort of leading to the idea or the view that we have that the production next year will not be significantly lower than the production of this year.

Yes. I was just thinking longer term, the yields from that region might even be better than some of the historic ones around Boundary Bend.

I don't expect there to be any materially different. Certainly, we are aiming at better variety in the replantings and everything else, but as a combination, considering all the ups and downs, we believe that the years are likely to be quite consistent.

Thanks, Mark. I've got Ian Munro from Ord Minnett.

Sam and Leandro, just looking at the investment in the U.S., are you able to call out any kind of lumpy CapEx items for the next 12 months ahead? Just trying to understand whether we get kind of a year-on-year increase in CapEx relative to FY '25 kind of based on what's been disclosed thus far?

Yes. No, the 1,500 hectares of land that we've purchased, about half of it was paid for in FY '25 and the other half in '26. Other than that, it's really steady investment in developing groves and then land that may or may not come up, can be lumpy and there's a number of acquisitions or a number of pipeline properties that we're looking at that could settle this year, next year, the year after, depending on which property you're talking about. So a little bit hard to comment on, but certainly, the Australian CapEx, we're expecting to be significantly lower, and CapEx focused in the U.S.A. To give you a sort of a sense, when we -- for 1,000-acre development, it costs us roughly $25,000 per acre. So USD 25 million over 3 or 4 years.

And just a reminder, you know this with the exception of obviously committed land purchases most of the rest of the CapEx, basically, the development of the growth is largely a discretionary decision that we obviously evaluate closely throughout to ensure that, that can be properly supported.

Congrats on very good results.

Thanks, Ian. We'll give [ Peter Parker ] and then we'll come to you, Larry.

A couple of questions with the share price. Congratulations, I see it tipped over $3 this morning. So that's a magnificent effort. I've seen you're only listed now for about 4 years, isn't it?

Yes, that's right.

How would the position we are now compared to what we issued when we did the prospectus? Are you on track or you're a bit ahead of it or it's better than you thought or what?

Yes, it's a good question, I think when we listed 4 years ago, we've done a significant amount of investment since then. And when we talk through the last 5 years of $250 million invested in the land that we've developed in Australia and the U.S.A. and processing those upgrades. I would say probably the U.S.A. is ahead of where we thought it would be in terms of land acquisition and development. The Australian business, of course, is a significant improvement in cash flow and profit compared to 4 years ago as well. But yes, overall, we'd say it's well ahead of where we would have expected it to be back when we listed.

Right. Because the share price for the first 3 or so years held well under that $2 mark. And what do you think has been the catalyst? Has it been more institutionals hopping on board because there's been a massive jump in the number of shares trading over the last couple of months. So what do you put that down to?

Yes. I mean we don't know. It's sort of something we can't control. I think we announced our unaudited EBITDA in early July of $115 million. It was reported $116 million today, so very close and our harvest results and Leandro relocating to the U.S. and there's certainly -- it looks like there's a lot more volume traded after that announcement. So I would say that's most likely the catalyst, but again, we don't know.

Yes. We see perpetual move from 6.69% to 7.8%. Are there any other institutions on board, you know?

Not that we can say. We sort of do a look-through of our share registry only every 6 months. So I'm sure there's more interest with more volume. I'd say some of those would be institutions. Whether they're existing or new, we don't know.

Yes. And this is a personal one, have the directors been selling any more shares?

No, definitely not. If we sell shares, we have to disclose it within a pretty short period. But I can tell you no, they definitely haven't been selling shares.

Yes. A final question. When Woolworths and Coles put discounts on, say, they half price or whatever they call it, 40%. Who actually pays for that?

Slightly different, I would say, with every supplier. But typically, it's shared between the supplier, so us and Coles and Woolworths, and based on pre-agreed plan for the 12 months ahead. So we work very collaboratively with the supermarkets on that and plan things appropriately.

Yes. And I suppose because the supply has been so tight, you haven't had to discount very much like you had in the past.

Well, we had a reasonably, I would say, a normal year with discounting overall, but it was We had to stop discounting early this year for 3 months because we were short of oil because of the demand. And then we pushed some heavier discounts into May, June when we had new season oil. So overall, we still invested in discounts and obviously giving our customers a chance to buy at a lower price is important to us and, of course, the supermarkets.

Yes. Well done, again. Keep up the good work.

Thanks, Peter. I've got Larry back again from Shaw.

A couple of other questions, on third-party supply. So one of the interesting things that's developing in Australia is your ability to use your infrastructure, your platform to encourage new substantial growers and then capture that volume. So I think you alluded to 1,000-hectare third-party supply in your slide where you kind of map out the future. But I also believe you're in discussion with other major growers that are pursuing other initiatives there in Australia. Can you talk to where we're at with building out that third-party supply?

In Australia, yes, you're right. We signed with the grower before Christmas, which was announced then to the ASX, 1,000 hectares, which will be planted over the next 18 months. We're constantly talking to a number of different parties about third-party supply arrangements, and they're all at various stages, but of course, we'll announce that, if any, materialize.

So the 1,000 hectares you referred to in the presentation on slide where you map out the future growth, where is that? That's...

That amount that we forecasted, that 19 to 23, that wasn't including the oil to come for the new 1,000 hectares. It is only including the 1,000 hectares that we're currently working with, which is the grove that was planted 5 years ago. It's not taking into consideration this new deal or any future deal that may come over the next few years.

Okay. That's interesting. And then with the U.S. with third-party supply, sort of reflecting on your constraints this year, how nimble can you be in capturing third-party supply? And I know you're very focused on planning your own groves, but can you talk to further developments in third-party relationships in the U.S.

I think it's a bit twofold, Larry. Existing groves in the U.S., it's quite a very limited pool of existing third-party groves that you can access and roughly the amount of supply has been relatively stable over the next few years or over the past few years, and mainly with sort of medium, longer-term contracts. I think there's very limited change, although we continue to talk to different existing growers, but it's a very small pool. I think that the most likely way of growing that pool is through new funds coming into the industry. But we felt that we needed to drive that process, for a number of reasons: quality control, quantity availability and also to lead the industry, and that's why we're doing the planting. As I said, because they are also very good investment on its own right. And I feel -- we feel in general terms, that a similar view may happen to others that will potentially join us as new third-party, but nothing that is actually firm and happened today. But that's probably the most likely way of growing third-party supply really moving forward is through new investment in the industry.

And I think just to add to that, Larry, in terms of spot purchases, it's very difficult to get either California or Australian oil, but we're certainly in the market trying to find more just to help plug any supply-demand gaps.

Okay. And your constraints in the U.S., I just need to be clear, that's not indicating flat sales. It's constraints in the context of your growth ambitions for FY '26. Is that fair...

Yes, we're targeting to keep growing our branded sales. The overall oil that we have to market though will be relatively flat next year, but then will really start to pick up the year after as our groves start to contribute more material amounts of oil out of the total pool.

If you see, Larry, our age profile of the trees in the U.S., you've seen that the significant new plantings really occurred from late 2023 onwards. So the fruits or the olives from those new plantings will really start to materialize more from the FY '26 harvest on -- sorry, the FY '27 harvest, which is the 2026 calendar year harvest onwards.

Okay. So if sales are going to be flattish in the U.S., I'm assuming there's not significant price growth. The marketing demands could continue to grow in the U.S., you need to stay relevant. Is that fair that maybe your marketing cost could grow faster than your sales in FY '26?

Probably relatively similar in percentage terms. I think it certainly doesn't constrain us from chasing distribution though. In the U.S., things move quite a bit slower. So the meetings that the guys are having with retailers now, you're talking about slots in 6, 12, 18 months. So we work towards our supply forecast. But no, I don't think as a percentage, it will be reasonably similar. It certainly won't be material in dollar terms. Thanks, Larry. I've got Jon Snape from Bell. I can see you up there, but you might need to unmute your mic, maybe.

We still can't hear you, Jon. Hand came down. We may have answered the question.

We'll give it another minute. It doesn't look like there's any more questions, but feel free to ask if you would like to. We'll just wait another minute or so. For those that missed part of this presentation, it is recorded, and we'll put it up on our website under the Investors section later on this afternoon. It looks like that's it. Thank you. Thank you so much, everyone, for joining. It was a good roll up today. So I really appreciate you taking the time. Thanks for the terrific support as shareholders, and we look forward to continue to deliver in the years to come. Thank you.

Thank you.